November 8, 2016
I had the opportunity to hear Joe Sprague, Senior VP of Communications for Alaska Airlines at the Anchorage Chamber of Commerce yesterday. On a personal note, I didn’t understand brand loyalty in the airline industry until I started flying Alaska Airlines in 2001. From aircraft maintenance to customer service – they have always exceeded my expectations. Have things gone wrong? Of course, but it’s how they handled the situations that mattered.
It’s because of this loyalty, I paid for a (rather good) $35 lunch to hear Mr. Sprague speak about the operational vision for Alaska Airlines.
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Alaska Airlines now holds 4% of the U.S. domestic airline market, and with their merger with Virgin Airlines, it strengthens their hold as the fifth largest airline in the U.S. domestic market. Due to mergers of their own, the top four airlines now occupy 84% of this market.
Mr. Sprague explained that they chose to merge to maintain profitability, and to maintain a secure foothold in the market through an increased scope and presence.
However, there’s a big difference in merger strategies. Historically, major airlines have merged when in financial distress. However, both Alaska and Virgin Airlines are merging while strong and profitable. Alaska has about 1000 routes and Virgin has 200.
“In the airline industry, either you’re profitable or you’re gone.”
~ Joe Sprague, Alaska Airlines
Statistically Alaska Airlines is the most on-time airline in North America. Next year they will celebrate 85 years of service that proudly started in Alaska.
Alaska Airlines currently serves 85 different non-stop destinations from Seattle, and 20 Alaskan communities –with 550,000 frequent flier members. For Alaskan residents, Club 49 is much appreciated in our aviation-reliant lifestyle.
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To support their growth over the next three years, they will inject $100 million of capital investment into Alaska’s economy. The projects include:
Hanger at Anchorage International Airport
The current hanger can’t safely accommodate the wingspan of the new generation 737s; to support their operations, it’s necessary to expand. The new $40 million hanger is being built on the NE corner of the airport and will be about 100,000 square feet. The new hanger will be able to hold two 737-700s at the same time, or a combination of smaller aircrafts.
Terminal Upgrades in Rural Communities
Unlike the way things work in the lower 48, Alaska Airlines has built and maintained many terminals in Alaskan rural communities for the last 30 years. Kodiak, Cordova and Yakutat are currently being updated and should be complete in early 2017. The other 8 rural terminals are scheduled for renovation over the next 3 years.
Dedicated Freighter Fleet
In anticipation of retiring the 737-400 Combi (darn, I love those planes), Alaska Airlines is converting three 737-700s into pure cargo planes for rural Alaska. One conversion has been completed in Tel Aviv and they have begun extensive testing. As this is the first of this model to undergo a pure conversion with FAA certification it will take more time, but the other two should progress at a faster rate. They hope to have the first aircraft in service by Spring 2017, and the other two in service by Fall 2017.
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Club 49 for Alaska Residents
If you’re a new Alaskan resident, be sure to sign up for Club 49. Alaska Airlines started out in this state, and they understand our aviation-dependent lifestyle. That’s why they offer 30% off last minute tickets (4 days prior to departure) and allow two free checked bags on fights within and to/from Alaska for verified residents.
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What else can we expect from Alaska Airlines?
As far as Virgin’s 63 airbuses, because most of Virgin’s planes are on long term leases, they will most likely continue in the fleet for at least a few years. These details will be addressed after the merger.
Alaska Airlines also will be adding more Embraer 175 regional jets to their fleet. They have 72 seats, first class, premium economy, power (in first), Wi-Fi and ovens for hot meals. There are currently 30 on order, with 33 options.
Two new domestic routes are scheduled to commence in Spring 2017 to Wichita and Indianapolis. Also, a new international route to Havana, Cuba starts on January 5, 2017 – making Cuba the fifth country served by Alaska Airlines.
Photo: Julia Hunter